Solid Q3 but growth initiatives hurt margins
We expect lower profitability mid-term
‘22e P/E of 7.7x and EV/EBIT of 5.4x
Q3: In line with ABGSCe, 15% sales growth y-o-y
Pion Group reported Q3 numbers that were roughly in line with ABGSCe. Sales were SEK 511m (+15% y-o-y of which 14% organic). EBITA was SEK 22.7m (25.8m) for an EBITA margin of 4.4% (5.8%). The lower profitability is explained by growth initiatives in QRIOS and Poolia, whereas Uniflex has experienced increased price pressure. The growth initiatives are believed to lead to higher margins in the coming years whereas PION will initiate a strategic overview of the pricing strategy in Uniflex, targeting the lowest margin contracts and trying to raise prices there. If successful, it will lead to higher growth and margins for Uniflex and if customers choose to leave it will not have a substantial impact on reported EBITA in absolute terms.